Golden rule: fair treatment, courtesy and honesty are at the heart of the McAvoy family's Industrial Metal Recycling company. (Cover Story).
While McAvoy is limited in his ability to spread his father's wisdom to the world at large, he has worked hard to apply it to the practices of Industrial Metal Recycling (IMR), the family business based in Oakland, Maine, that he now runs.
The success the company has had in the past two decades seems to show that honesty is the best policy and that, happily, nice guys do not always finish last.
EARLY SCRAP EXPOSURE. The scrap metal industry has been a familiar part of Peter McAvoy's life from an early age. Peter was one of eight children (seven boys, one girl) growing up as part of a family that followed their father where his job as a "rigger" took him. His father's work involved constructing, assembling and repairing machinery at great heights and other hard-to-reach places. "Whenever there was a tough job anywhere in the country, including Pearl Harbor after the attack, they knew they could call George McAvoy," recalls Peter.
Originally from Maine, the McAvoy family travels took Peter to different parts of the country, and spurred he and his older brothers to seek out different types of work when arriving in new cities. During a stay in Kansas, one of Peter's older brothers worked at a scrap yard, a business that intrigued Peter. "I started my career at age six, when I found out from my older brother how scrap yards pay cash for discarded metal," recalls Peter. "I joined up with two girls at my school who had a red wagon, and we looked for metal to bring to the scrap yard." Peter chuckles recalling that one of the young crew's best "sources" of metal turned out to be just over the fence line of the scrap yard's property, where pieces of scrap in higher piles occasionally fell over the fence.
"The owner of the scrap yard knew, and wanted to clean it up, but didn't have enough full-time help to do it," says Peter. "So he gave me a magnet and told me he would pay more for the shiny stuff that didn't stick to the magnet." Adds Peter, "Almost every story you read about scrap companies starts out with someone's grandfather going around with a wagon or an old truck to start the business. I guess I will be that old guy they talk about 30 or 40 years from now."
Several years after his red wagon days, while Peter was recovering from a broken back suffered while working as a longshoreman, one of his other brothers and a friend entered the scrap business in Maine, after the McAvoy family returned there.
They worked as peddlers for scrap that they took to the yards of dealers. "They would work hard for a couple of days, then spend a week enjoying living off what they had made," recalls Peter. "I wondered what would happen if you worked full-time and didn't take the time off to spend your money."
At the time, Peter was having trouble finding work while recuperating. "I convinced my local banker to loan me $500 to buy a 20-year-old one-and-a-half ton truck and a set of torches," recalls Peter. "I had no collateral, but he said he would stick his neck out because I had a job lined up to clean up an old granite quarry for the State of Maine. The quarry is now a state park, and more than 30 years later I'm still with the same bank."
Eventually, Peter and his brother Brian started a scrap and salvage business that often concentrated on harvesting the metals at abandoned industrial sites. This line of business ultimately produced the opportunity that created the company now called Industrial Metal Recycling.
CLEAN-UP CREWS. "It all kind of started in 1986 with me getting a phone call about a large factory that was once here in Oakland called Diamond Match," says Peter of the origins of Industrial Metal Recycling.
The Diamond Match facility produced matches, ice cream bar sticks and other sawmill products before being suddenly shut down by its ownership group that year. Although Peter's initial interest was in cleaning out the site and perhaps purchasing obsolete equipment, it soon became clear that the ownership group wanted an offer for the entire property.
Surprisingly to Peter, the owners accepted what he considered to be a low offer for the property. "We sold off a lot of equipment and got the money back we invested in it and started running a scrap company from the property," says Peter, who eventually bought out his partner in the venture.
The newly established Industrial Metal Recycling soon started taking on a family feel, as Peter's younger brother Brian and other McAvoy family members began playing key roles in the growing business. (See the "Family Trust" sidebar.) Peter says he still looks back fondly on the days when he could pay his younger brother in M&Ms to strip
a motor block or otherwise prepare scrap. "Brian's always been with me, and he was the one encouraging us to get into the scrap business after a three-year absence. He's always been my right-hand man."
Having made a commitment to enter the scrap metals business, it was clear that the McAvoys were going to need a niche. Based on their initial real estate clean-up experiences, offering a combination abandoned site clean-up and scrap disposition service was a logical choice.
Events in the scrap market and regulatory climate steered Industrial Metal toward an additional clean-up specialty: white goods. "In 1989 in the Northeast, there was what could be called a 'white goods crisis,' when environmental-related issues curtailed the shredding of old appliances," notes Peter.
Although shredding plants stopped accepting obsolete refrigerators and other appliances, communities in New England continued to collect them. "They were accumulating near town landfills, sometimes in piles of 2,000 tons or more," recalls Peter.
Industrial Metal Recycling was able to offer a service to towns where it drained hazardous fluids and otherwise prepared white goods for baling in a portable Sierra machine, then shipped the scrap to awaiting markets in Montreal. "We drained the oil and placed roll-off containers so nothing hit the ground," says Peter.
Current Industrial Metal chief financial officer Wayne Bowers is also trained as an environmental chemist, which helps the company maintain its competitive advantage in clean-up and proper material handling techniques.
The combination service and scrap preparation task was similar to the abandoned site clean-up niche for which Industrial Metal Recycling was becoming increasingly well known.
INSPIRING CONFIDENCE. Since its creation in 1986, Industrial Metal Recycling has enjoyed growth as a company by any yardstick used. The company has grown in volume of materials handled; the size of its customer base; the amount of processing equipment it uses; number of employees; annual revenue; and the number of facilities from which it operates (from the original one to four).
Peter McAvoy credits the Golden Rule preached by his father as the cornerstone of the company's success. From his company's first clean-up projects, Peter and his co-workers always made sure to leave behind a spotless job site. "My father always said give at least $1.10 worth of work for every $1.00 someone gives you. We made sure the people were satisfied after we left."
Positive referrals from property owners and municipal public works officials among each other generated a steady stream of business for Industrial Metal Recycling cleanup projects at what Peter calls "old bone yards" throughout Maine.
In 1990, IMR purchased the accounts and inventory of the former Brewer Junk Co. in the town of Brewer, relocating the operation to a piece of property in nearby Bangor, Maine's second-largest city. IMR outfitted the yard with a 380-ton Sierra shear baler and expanded the operations to adjacent land parcels. It now ranks as the company's highest-volume yard.
During the Brewer Junk Co. clean up, thousands of old battery casings were found from a battery breaking operation conducted by the former owners. IMR worked with the Maine Department of Environmental Protection (DEP) to work with other potential Superfund PRPs (potentially responsible parties) to voluntarily pool funds and clean up the property.
According to Peter, the Maine DEP agreed to accept a fixed dollar amount contribution from PRPs with no admission of responsibility. In almost all cases, it probably was a fraction of what is normally spent on legal fees alone, he notes.
At the project's completion, the city of Brewer had some funds remaining to partially fund the cost of creating an athletic field on the old site, but not enough to complete it.
"Together, everyone worked to complete one of the Northeast's first brownfield developments," says Peter. "Today, there is a beautiful park, complete with a baseball field and jogging and walking trail. Being part of this project is one of our proudest accomplishments," he adds.
In 1995, the company added a location in Arundel, a town in southern Maine. Business from that location has grown steadily, notes Peter, nearly matching volumes processed at the original Oakland facility.
And in 1999, Industrial Metal Recycling purchased an existing scrap facility in Augusta, Maine's capital. This yard is located in an historic, gentrifying neighborhood, so the McAvoys are already working with Augusta officials to re-locate to land purchased near the city's landfill.
Each of the locations serves as a processing and shipping center for scrap collected in Industrial Metal roll-off containers at industrial and demolition sites. Each also now has a thriving scale trade, which wasn't always part of the Industrial Metal plan, Peter concedes. "We didn't even have a scale trade [at first] and we weren't looking for one," he remarks.
"In late 1987 we finally put a scale in at our Oakland facility," recalls Peter. "As soon as we put the scale in and word got out, the retail business just took off."
Once again, Peter points to Golden Rule thinking that helped set the company apart. "We have a price list and handouts on how to prepare scrap, and a large price display in the window," he notes. "When I went to other scrap yards, I'd see things that would frustrate me: Customers waiting an hour and having to drive through mud up to their bumpers to drop off scrap. We looked at things and made mental notes of what it would take to make people as happy as possible to come into the scrap yard. We've tried to build a company from that point of view--get them in and out quickly and treat them fairly. It's not intimidating to come here."
The company has taken similar measures to be courteous and customer-focused on the scrap sales side as well. While acknowledging that he feels loyalty toward domestic mills and keeping them competitive, he also says that he has always strived to treat export brokers from China and other nations as equal customers.
"When Chinese buyers first came into the market, they weren't always treated like desired guests at some other companies," Peter remarks. "I would hear stories about them buying loads and getting large quantities of dirt along with their scrap. People did not treat them very well. My theory is, everyone is equal. We treated them with respect, took them to our facilities, went over specifications; we developed a trust with those buyers."
As a result, Peter says that Industrial Metal Recycling does not see sporadic Chinese buying as some competitors claim. "I've never seen a time when there is no Chinese market. They know we're consistent and honest. We have a history with them. They don't even have to send someone out to watch us load the containers. I probably haven't had 10 claims in 15 years, and never a major one."
Peter again points to the Golden Rule as the reason for the company's growth and success. "We really have tried to build the business just by doing the right thing. We've just continued to add more and more customers. We don't have any salespeople; our customers are our salespeople. And now we have a company we're quite proud of."
EQUIPPED FOR SUCCESS
There are probably several reasons why Industrial Metal Recycling (IMR) has thrived over the past 15 years, but one pointed to by president Peter McAvoy is the company's willingness to invest in high-quality equipment.
The company has made major commitments to key equipment suppliers that its research has shown offer maximum productivity and reliability. Inventory at the IMR facilities typically consists of three to four million pounds of finished nonferrous product and 30,000 to 60,000 tons of ferrous inventory. ("Quite a difference from the red wagon days," quips Peter.)
For metals processing, the company has purchased ten pieces of equipment from Sierra International Machinery Co., Bakersfield, Calif., and has developed a close relationship with the Sacco family that owns it. "The relationship with the Sacco family and their equipment has been a good part of the Industrial Metal story," says Peter.
"It was a little tough to pull the trigger" on the purchase of two new Sierra machines when his company was still young and unestablished, says Peter. But he immediately saw high productivity returns from the purchases, and continues to be impressed by the performance of those two machines and additional Sierra machines purchased subsequently. "I can't even estimate how many tons have now gone through those first two shear-balers," says Peter.
"The only problem with their balers and shears is that for awhile we couldn't load them fast enough," he recalls. That problem has been addressed with a switch to Fuchs-Terex scrap handling machines. IMR has purchased five new Fuchs machines in the past year. "The Fuchs machines have been fantastic, adding 50 percent to our throughput in some applications," says Peter.
A telephone roster of the Industrial Metal Recycling staff would skew heavily toward the letter "m," as president Peter McAvoy is the first to acknowledge.
In addition to Peter, these other family members are part of the 70+ person staff of the Maine recycling company:
* Brian McAvoy, Peter's brother, serves as general manager of the company, with increasing responsibilities for export sales
* Ralph McAvoy, another brother, manages the Augusta location
* Gloria McAvoy, Peter's wife, manages the accounting and payroll areas
* Sharon McAvoy, Peter's sister, works in dispatch and customer relations
* Peter McAvoy II, his son, has been training in all areas of the business at the Oakland facility and will be attending college in Providence, R.I., in the fall.
* Daughters Megan and Shannon McAvoy work after school and during the summer in the Oakland office
* Derek Short, Peter's son-in-law is ferrous manager and maintenance manager in Oakland
* Loretta Grey, Peter's mother-in-law, was a long-time dispatcher currently battling ALS (also known as Lou Gehrig's disease). She had to leave the company about a year ago and is "greatly missed," says Peter.
The author is editor of Recycling Today and can be contacted via e-mail at btaylor@RecyclingToday.com.
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|Comment:||Golden rule: fair treatment, courtesy and honesty are at the heart of the McAvoy family's Industrial Metal Recycling company. (Cover Story).|
|Date:||Jul 1, 2003|
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